The economy is considered to be at full employment when the actual unemployment rate is equal to the natural rate. When the economy is at full employment, real GDP is equal to potential real GDP.
To economists, full employment means that unemployment has fallen to the lowest possible level that won't cause inflation.
If there is an increase in aggregate demand, the price level will go up. Once wages have adjusted to that inflation in the long run, SRAS decreases and returns the economy to full employment output.
Full employment is when all available labor resources are being used in the most efficient way possible. Full employment embodies the highest amount of skilled and unskilled labor that can be employed within an economy at any given time.
BLS defines full employment as an economy in which the unemployment rate equals the nonaccelerating inflation rate of unemployment (NAIRU), no cyclical unemployment exists, and GDP is at its potential.
When the economy is at full employment that increases the competition between companies to find employees. This means skilled workers can demand higher wages with more benefits and businesses are more likely to grant them.
Full Employment. The condition in which people who are able and willing to work are employed. Labour Force. Those who are employed or unemployed but are actively seeking for work.
Feb 7 (Reuters) - The U.S. economy is not at full employment, and likely will not get there until 2024, according to a research note of the San Francisco Federal Reserve Bank published on Monday.